Kieron Bassett column: Do you think you’ve got an appetite for risk?

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Are you a saver or an investor? Although saving and investing are related, it is perhaps best to define each one before finding out which one suits you best.

Saving is the process of putting money aside, either on a regular basis, or possibly a lump sum that you may have inherited.

The money deposited has to be safe and guaranteed not to fall in value, and often has to be available at short notice.

Investing differs in that the money invested generally does not have any guarantees attached.

Some investments can rise or fall very quickly and therefore should only be considered by people who are prepared to lock up their capital for at least five years.

The profile of a saver is someone who feels that financially, or emotionally, they could not contemplate a loss on capital.

The investor is someone who has excess capital and is prepared to take some risk.

Some people are adventurous investors and some are cautious, but they both share the common bond of trying to obtain returns in excess of deposit rates.

If you are a saver by nature, it is best not to force yourself to become an investor.

As I always say, no matter what the financial returns are, if you lie awake at night worrying about your investments, it is not worth it.

However, if you think you might be an investor it is worthwhile contacting an Independent Financial Advisor who through questioning and risk profiling can determine your appetite for risk.